Kenya has secured a Ksh 77.3 billion (US$750 million) syndicated loan for seven years from the Trade Development Bank (TDB) to pay off creditors in another two-year syndicated loan that was extended last year, Reuters reports Tuesday quoting two banking sources.
The government was also set to issue a Ksh 154.6 billion (US$1.5 billion) Eurobond for 10 years by the first week of March, to take advantage of high demand for new issues, one of the sources told the news agency.
According to Reuters, both Kenya’s 2019 issue and the 2024 bond have seen their yields fall by about 100 basis points since November last year.
Officials at the National Treasury did not respond to a request for confirmation of the information from Reuters.
TDB, a regional bank formerly known as PTA, was also not immediately available for a comment. The terms of the new syndicated loan were also not immediately available.
National Treasury Cabinet Secretary Henry Rotich had last November said a six-month extension of the syndicated facility had been agreed with 90% of investors. Funds raised from a new Eurobond issue could be used to pay off the outstanding amount, he said.
The extension was partly caused by a prolonged presidential election, after the Supreme Court nullified the first vote and ordered a re-run. That disrupted government programmes and raised the political risks associated with investing in Kenya.
Stability has since returned after President Uhuru Kenyatta was sworn in for a second term on November 28, but investors could demand a small premium on the upcoming dollar bond because of the country’s fiscal deficit, which climbed to 9% in the year to last June, said the source.
“It is very likely that they will be punished for that,” the source told Reuters.
According to Bloomberg sources, the government plans to re-enter the Eurobond market before the end of the current budget year, though a placement is likely from February onward as funds are required for spending purposes. The National Treasury is seeking to plug a budget deficit that’s forecast to narrow to 6.4% of gross domestic product in the fiscal year through June from 8.5% last year.
In November last year, it emerged the government had asked banks to make proposals that were required outline the costs of either a five- to 10-year issue to be repaid in bullet form, or 12- to 15-year securities amortizing in the final three years. A road show is expected any time soon.
The last Eurobond issue was marred by controversy after Opposition leader Raila Odinga claimed a huge chunk of the money was diverted and swindled by individuals even before being disbursed to Kenya as the government struggled to identify projects in which the funds were utilised.
Auditor General Edward Ouko, in his September 2016 report, also declared that Sh215 billion could not not been accounted for even after the Government claimed the cash was allocated to ministries two years earlier. The National Treasury dismissed the findings.
Oxford launches guidebook for new curriculum
Oxford University Press (OUP) East Africa has, in partnership with teacher trainers, launched a free resource book in preparation for competency-based...
5 simple tricks Gordon Ogada used to win Sh230m mega jackpot
Gordon Paul Ogada, the guy from Kibera who won the SportPesa Mega Jackpot worth Ksh230,742,881 two weeks ago, is has...
Drivers to pay Sh5,000 for refresher course
NTSA will also subject the drivers to medical tests on conditions that my affect their daily duties in the road
Govt partners with Johnson & Johnson on cancer control
The National Cancer Control Strategy 2017-2022 is geared at reducing cancer incidences, morbidity and mortality in Kenya
Six-year-old boy creates high-tech computer game
EthanMan app is available for downloads on android play store for kids to read books and play games
Miguna makes fresh demand on passport
Judge Kimaru said the removal of Miguna Miguna from Kenya on February 6th was illegal and had no merit in...
Citizens to get Sh30,000 bonus as economy grows
Singapore expects an overall budget surplus equivalent to 2.1 percent of its GDP
Gold worth Sh100 million found at JKIA
The gold is alleged to have been in the custody of a 46-year-old Tanzanian man
Water crisis hits major towns as rivers dry up
Athi Water Services Board, which manages water resources in various urban areas, notes 75% of Nairobi residents do not get...
Ebola scare after a student dies in Keiyo South
County executive says they have already communicated with the ministry of Health headquarters and a sample sent to the Kenya...